Outrage boils over as B.C. government plans to sell groundwater for $2.25 per million litres

John Challinor, director of corporate affairs for Nestlé Waters Canada, says B.C.’s new water management program should be ‘self-funded.’Photo by
RICHARD LAM

More than 82,000 people have signed a petition against the government’s plans to sell B.C.’s water for $2.25 per million litres.

“It is outrageous,” says the online petition from SumOfUs.org, that corporations can buy water “for next to nothing.”

B.C.’s Water Sustainability Act (WSA), which comes into effect next January and replaces the province’s century-old water legislation, has been heralded as a major step forward. But politicians and experts are raising doubts over whether the newly announced water fees may be too low to cover the cost of the program, asking if the act simply won’t be implemented properly, or if taxpayers could end up picking up the bill.

Last month, the government unveiled the new water pricing structure, which will include, for the first time in B.C.’s history, groundwater being regulated and subject to fees and rentals.

Critics said that, while it’s a step in the right direction, the prices are still not close to capturing the resource’s value.

Under the new regime, most residential water users won’t see a big difference. Households with wells are exempt from fees, and homes supplied by municipal water systems may pay $1 or $2 more per year, according to the ministry.

But water rates for industrial users, which are a fraction of what some provinces charge, are “like a giveaway” to corporations, critics say.

NDP environment critic Spencer Chandra Herbert said the new legislation is “promising,” but questioned whether it would actually live up to its promise, or just remain “nice words on paper.”

“I don’t think the water’s being properly valued in order to properly protect it,” he said, adding effective water management involves “boots on the ground” to enforce the act, and “policy people” to make decisions.

“A lot of business groups, community groups, farmers — they want to see better protection for their water. I’m just worried we’re not going to get it.”

When Chandra Herbert raised the issue last month in the legislature, Environment Minister Mary Polak replied that British Columbians are “quite proud” that B.C. “has never engaged in the selling of water as a commodity.”

Polak said: “We don’t sell water. We charge administration fees for the management of that resource.”

A Ministry of Environment spokesman said the new fees and rentals have been set to cover the cost of administering the new WSA, estimated at $8 million per year.

In the legislature, Polak pointed to the example of Nestlé, Canada’s largest bottled-water producer, which operates a plant in Hope and, she said, will be “charged at the highest industrial rate.”

Under the old Water Act, Nestlé, like other groundwater users, didn’t need to pay the government anything for water withdrawals. But under the WSA, Nestlé will start paying for the hundreds of millions of litres of groundwater they withdraw, bottle and sell. That rate of $2.25 per million litres — the highest industrial rate in the new price structure — means Nestlé will pay the government $596.25 a year for 265 million litres.

Under the WSA, Nestlé and other groundwater users also will begin paying permit fees. A Nestlé executive said he expects the annual fee for water-bottling companies to be between $1,000 and $10,000.

The government’s review of water pricing is a “once-in-a-generation opportunity,” said Oliver Brandes from the University of Victoria’s POLIS Project. But there’s still “significant uncertainty,” he said, about whether the new system will provide sufficient resources to implement the act.

The WSA, he said, “has the potential to be revolutionary, but only if it’s fully — key word, fully — implemented, which requires dollars.”

Someone needs to pay that bill, Brandes said, whether it’s B.C. taxpayers or water users. And linking that cost recovery to the large-scale industrial users, he said, may be not only more ecologically and financially sustainable, but more fair as well.

If the new fees fail to cover the cost of the program, that could effectively mean industries enjoy cheap water subsidized by taxpayers, said David Zetland, a professor of economics and a water pricing expert.

“And if the taxpayer’s subsidizing it, that’s a scandal,” said Zetland, who previously taught at SFU.

The government expects that won’t happen, but Zetland suspects, with the current rates, “taxpayers are going to be on the hook.”

John Challinor, Nestlé Waters Canada’s director of corporate affairs, said: “All monies collected should be used solely to support the management and enforcement of the regulation. This program should not be subsidized by taxpayers who don’t draw groundwater.”

The program should be “self-funded,” Challinor said, with pricing “based on a full cost recovery model” to cover mapping of watersheds, audits, management and enforcement.

“We have always agreed to pay our fair share for groundwater. But, we also believe that all commercial, municipal and domestic groundwater users should pay their fair share.”

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